Stifled under the weight of debt accumulated in the form of survival loans during the pandemic, Juliette & Chocolat’s 10 restaurants file for bankruptcy. This situation could affect many other institutions as the loan repayment deadline approaches.
• Also read: Juliette & Chocolat: the 10 closed restaurants
“I repaid more than $1 million last year on interest alone. We can last a year like that, but for the expected year it would be closer to $1.5 million. I don’t have bottomless pockets,” says founder Juliette Brun, who founded the company 20 years ago and has had to lay off around 350 employees.
The entrepreneur had never borrowed before the pandemic, but sanitation-enforced shutdowns have caused sales to drop, requiring emergency loans, particularly from the federal government and the city of Montreal. Some were compulsorily contracted at variable rates. Due to the rise in interest rates over the past year combined with inflation, customers did return to the branch, but nothing went well. Juliette Brun searched for solutions to the last, determined to repay her debts.
Juliette Brun would have liked to renegotiate the terms of debt repayment to save the company. Juliette&Chocolate
“Even if I closed some restaurants that were more difficult to operate, all the debt would fall on the most profitable restaurants, and then they wouldn’t have been profitable anymore. “It was an unsolved puzzle,” said the one who was happy to negotiate an extension of the loan term.
“The price of debt compared to the price of closing a company when they hired 350 people, generated $10 million in revenue and paid taxes… it hurts a country when you lose that,” Juliette Brun muses as she discusses the possible addition reflects other similar bankruptcies.
- Listen to the economic chronicle of Francis Gosselin, economist at the microphone of Jean-François Baril QUB radio :
Requested to extend the refund period
The Association des restaurateurs du Québec (ARQ) is also calling for the loan repayment deadline to be postponed so as not to lose too many companies.
“There is stress about the December 31, 2023 deadline and we have people who think they can’t make it,” observes Martin Vézina of ARQ Public Affairs.
Eligible companies received loans ranging from $40,000 to $60,000. In the hospitality industry, where profit margins average 4%, a $1 million business will only make $40,000 in profit, making it difficult to repay loans quickly.
“Our restaurateurs also had to increase their salaries and the cost of their food has also increased. As it is understaffed, opening hours are often shortened. This also reduces potential sales. It’s difficult,” says Mr. Vézina.
Determined to start all over again
Juliette Brun takes full responsibility for her bankruptcy despite the uncontrollable events she faced.
“The hardest thing is not working with my team, my Red Hats anymore. It hurts, I let her down a bit. I didn’t really keep my contract with them,” she says, sad that she couldn’t guide the boat to the port.
Every employee who has been in office for more than three months receives 8 weeks of salary adjustment.
Juliette Brun still has her recipes and the desire to start from scratch. Juliette&Chocolate
Even if she loses premises and equipment, Juliette Brun is determined to get back on her feet.
“I know you have to start from scratch, but I’m not the type to give up easily. It’s important not to get discouraged. I have five children and it is my duty to show them what resilience is,” she admits.
The online shop has to close temporarily, but the Juliette & Chocolat brand still belongs to Juliette Brun, as do her recipes, and already the staff are raising their hands to continue once everything is cleared with the insolvency administrator.
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